6 ways to in­crease your rental prop­erty in­come

Wangaratta Chronicle - North East Property Guide - - PROPERTY GUIDE - Writ­ten by view.com.au in Buy­ing

For prop­erty to re­main a fruit­ful source of in­come, in­vestors must focus on long- term rental yields.

High rental re­turns are the corner­stone of suc­cess­ful prop­erty in­vest­ment and there are sev­eral ways you can help boost your rental prop­erty in­come. If you’re look­ing to get the most from your in­vest­ment and boost rental yields, here are some proven tips to help:

1. Mi­nor cos­metic makeovers that cre­ate mas­sive im­pact

You don’t have to spend a for­tune to im­prove your re­turns on a rental prop­erty. In fact, mi­nor cos­metic makeovers, such as fresh paint jobs, tidy­ing the garden and im­prov­ing the light­ing can make a big im­pact.

Kerb ap­peal is also crit­i­cal for higher rental re­turns. In­vestors can make their prop­er­ties more rent-ready and at­trac­tive to ten­ants by show­ing a lit­tle TLC.

Some sim­ply ways to boost your prop­erty’s ap­peal could in­clude re-paint­ing the front door, up­grad­ing ex­te­rior light­ing, power wash­ing garage doors and in­vest­ing in some land­scap­ing. Built-in con­crete planters, new garden paths and freshly mulched garden beds can also go a long way to in­crease kerb ap­peal. Trees, good land­scape de­sign and easy-to-main­tain plants may also help to in­crease prop­erty value – and could boost rental re­turns.

2. In­vest in high value ren­o­va­tions

For bud­gets with ex­tra breath­ing space, in­vest­ing in high value ren­o­va­tions can in­crease your rental yield and keep your prop­erly aligned with the cur­rent mar­ket. How­ever, it’s cru­cial to speak with your prop­erty man­age about any ma­jor changes to en­sure the ren­o­va­tions are worth­while. This saves you in­vest­ing your time and money into some­thing that may not of­fer you the best re­turn. Kitchens and bath­rooms add the most value to a home, as th­ese are prime spa­ces. If you can’t do a com­plete gut job, focus on up­dat­ing the fit­tings and fix­tures. Cost-ef­fec­tive, mod­ern tiles can also trans­form the bath­room, while up­dated ap­pli­ances can mod­ernise the kitchen. In­stead of rip­ping out old kitchen cab­i­nets, con­sider re­plac­ing the doors and han­dles or sal­vaging to save money. Struc­turally sound rooms can also be en­hanced via a new colour scheme, bench­tops and floor­ing.

Im­prove the prop­erty’s ap­peal through smart ren­o­va­tions. Items such as air con­di­tion­ing, se­cu­rity screens and dish­wash­ers have a big in­flu­ence on the rent and at­trac­tive­ness of your prop­erty, en­tic­ing prospec­tive ten­ants. In­vestors with es­tab­lished prop­er­ties may also want to con­sider up­dat­ing in­te­rior doors with mod­ern han­dles and se­cure locks, adding new win­dow treat­ments and up­dat­ing floor­ing. Rip­ping out old car­pet or floor tiles can be a big job, but it’s a large-scale im­prove­ment that could have a huge im­pact.

3. Add ad­di­tional liv­ing space

Prop­erty ex­ten­sions, such as adding an ex­tra bed­room or liv­ing area may add sig­nif­i­cant value to a prop­erty. Granny flats are another op­tion to po­ten­tially boost your re­turns. If space or bud­get doesn’t per­mit how­ever, you could con­vert a loft or garage, or re­model the in­te­rior by re­mov­ing non-bear­ing walls to open up the space. It’s im­por­tant to con­sider the de­mo­graph­ics of the area and the needs of your tar­get ten­ants be­fore mak­ing th­ese changes. Ad­di­tional bed­rooms or liv­ing spa­ces can add con­sid­er­able value to a prop­erty, but big­ger isn’t al­ways bet­ter if that’s not what your ten­ants are look­ing for. Two-bed­room dwellings in Mel­bourne’s in­ner city, for ex­am­ple, are ex­pe­ri­enc­ing the big­gest price growth with a me­dian price climb of 14.7%, while four-bed­room homes have only in­creased 8.5% in the same area.

4. Hire a good prop­erty man­ager In­vestors can also in­crease their rental prop­erty in­come through a rep­utable prop­erty man­ager.

En­gag­ing with an agent of­fers valu­able in­sight into the prop­erty mar­ket and op­por­tu­ni­ties to boost rental growth. They also have a good un­der­stand­ing of owner’s needs, so can as­sist with your prop­erty in­vest­ment jour­ney.

The right man­ager can make a big dif­fer­ence with the re­sults of your in­vest­ment. Ul­ti­mately, you want the best ser­vice rather than the best deal (the say­ing you get what you pay for reigns true here!). How­ever, re­view prop­erty man­age­ment fees on a yearly ba­sis to en­sure the ar­range­ment is still aligned with your prop­erty in­vest­ment goals.

5. Stay up­dated with mar­ket changes Prop­erty in­vest­ment shouldn’t be a set and for­get op­por­tu­nity.

As an in­vestor, you want to keep your fin­ger on the pulse with the lat­est mar­ket changes. This may present op­por­tu­ni­ties to in­crease the rent or of­fer long-term leases. Although a great prop­erty man­ager will keep you up­dated and of­fer ex­pert ad­vice along the jour­ney, it’s a good idea to do your own mar­ket re­search and ed­u­cate your­self.

6. Be tax savvy

Do you know what prop­erty items are tax de­ductable?

Rental prop­erty ex­penses can boost your tax re­fund, in­creas­ing your over­all yield. Max­imise your tax sav­ings by claim­ing es­sen­tial items. Some of th­ese may in­clude:

Prop­erty in­sur­ance

Re­pairs, main­te­nance, ser­vic­ing costs and ren­o­va­tions

Advertising for ten­ants and prop­erty man­age­ment fees

Wa­ter charges

Pest con­trol

Lease costs, in­clud­ing prepa­ra­tion, regis­tra­tion and stamp duty

Own­ing an in­vest­ment prop­erty can be a rewarding jour­ney, es­pe­cially when the rental re­turns are healthy. Aus­tralia is con­sid­ered a lu­cra­tive coun­try for prop­erty in­vestors be­cause of the good rental yield. So how will you be in­creas­ing yours?

Au­thor Bio

This ar­ti­cle is writ­ten by Jayde Fer­gu­son, who rec­om­mends Mo­men­tum Wealth. Of­fer­ing mar­ket lead­ing re­search and ad­vice on the Aus­tralian prop­erty mar­ket, the com­pany helps clients ac­cel­er­ate their wealth through prop­erty in­vest­ment by as­sist­ing them in the strate­gic plan­ning, fi­nanc­ing, ac­qui­si­tion, man­age­ment and de­vel­op­ment of their com­mer­cial and res­i­den­tial in­vest­ment prop­er­ties. Catch Jayde on Google+.

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